COMPARING GRACE TO CURRENT METHODOLOGIES IN HEALTH AND TRANSPORT ECONOMICS - APPLICATION TO NONFATAL ROAD TRAFFIC INJURIES BASED ON RISK PREFERENCES AMONG THE SWEDISH GENERAL POPULATION
Author(s)
Sara Olofsson, PhD1, Michael Willis, PhD2, Ulf Persson, Sr., PhD2.
1Research Director, Institutet för hälso-och sjukvårdsekonomi, IHE, LUND, Sweden, 2The Swedish Institute for Health Economics, Lund, Sweden.
1Research Director, Institutet för hälso-och sjukvårdsekonomi, IHE, LUND, Sweden, 2The Swedish Institute for Health Economics, Lund, Sweden.
OBJECTIVES: Transport economics and health economics both use quality-adjusted life-years (QALYs) for measuring health. This means that they may result in biased estimates due to the underlying assumption of constant marginal utility. This study applied the Generalized Risk-Adjusted Cost Effectiveness (GRACE) model, developed to introduce diminishing marginal utility, to the valuation of non-fatal road traffic injuries.
METHODS: A survey of the Swedish general population was used to estimate certainty equivalence (CEs) for injuries differing in severity (10-50-point reductions, 0-100 scale) and duration (1 year, permanent). Risk preference parameters, derived using the utility functions CRRA, EP, and GLU, were applied to the GRACE framework for estimating the value of a statistical injury (VSI). VSI estimates were also derived from willingness to pay (WTP), the conventional health (CH) approach, multiplying QALYs by threshold value and the conventional transport (CT) approach, multiplying fatality risk equivalents by value of a statistical life (VSL).
RESULTS: For the least severe injury (10-point reduction), GRACE/CRRA estimated a VSI of €0.30 million and €15,000 for permanent and temporary injury respectively, similar to WTP (€0.38 million, €10,800) and CH (€0.18, €7853) but lower than CT (€0.65, €30,716). For the most severe injury (50-point reduction), GRACE/CRRA estimated a VSI of €3.24 and €0.15 million for permanent and temporary injury respectively, similar to WTP (€3.00, €0.08) and CT (€3.21, €0.15) but higher than CH (€0.91, €0.04). CRRA provided the best fit for permanent injuries, while EP performed better for temporary injuries.
CONCLUSIONS: By incorporating risk preferences from VSL, the result suggests that CT provides appropriate value for severe injuries but overestimate value of less severe injuries. In contrast, the CH may severely underestimate more severe injuries if using a fixed threshold value. GRACE offers a sector-independent approach to health valuation that may better reflect individual preferences.
METHODS: A survey of the Swedish general population was used to estimate certainty equivalence (CEs) for injuries differing in severity (10-50-point reductions, 0-100 scale) and duration (1 year, permanent). Risk preference parameters, derived using the utility functions CRRA, EP, and GLU, were applied to the GRACE framework for estimating the value of a statistical injury (VSI). VSI estimates were also derived from willingness to pay (WTP), the conventional health (CH) approach, multiplying QALYs by threshold value and the conventional transport (CT) approach, multiplying fatality risk equivalents by value of a statistical life (VSL).
RESULTS: For the least severe injury (10-point reduction), GRACE/CRRA estimated a VSI of €0.30 million and €15,000 for permanent and temporary injury respectively, similar to WTP (€0.38 million, €10,800) and CH (€0.18, €7853) but lower than CT (€0.65, €30,716). For the most severe injury (50-point reduction), GRACE/CRRA estimated a VSI of €3.24 and €0.15 million for permanent and temporary injury respectively, similar to WTP (€3.00, €0.08) and CT (€3.21, €0.15) but higher than CH (€0.91, €0.04). CRRA provided the best fit for permanent injuries, while EP performed better for temporary injuries.
CONCLUSIONS: By incorporating risk preferences from VSL, the result suggests that CT provides appropriate value for severe injuries but overestimate value of less severe injuries. In contrast, the CH may severely underestimate more severe injuries if using a fixed threshold value. GRACE offers a sector-independent approach to health valuation that may better reflect individual preferences.
Conference/Value in Health Info
2026-11, ISPOR Europe 2026, Vienna, Austria
Value in Health, Volume 29, Issue 12S
Code
MSR244
Topic
Economic Evaluation, Methodological & Statistical Research, Study Approaches
Disease
Injury & Trauma